Investment in highly skilled work force is vital to stimulate UK’s economic growth, says LSN

Based on international comparisons, the Fair Shares report recently released by not-for-profit education body LSN, in partnership with the Pearson Centre for Policy and Learning, examined the models for employer contribution to skills, addressing in turn the main downfalls of the Business Innovation and Skills strategy (BIS).

According to the report, employers in the UK currently contribute only £6 billion to skills investment, which is a mere £250 per employee.

Raj Patel, director of research and policy at LSN, said: “Past government policy has diminished the critical role employers can play in investing in skills.”

It is believed that UK employers are under-investing compared to competing nations. The statistics reveal that Britons spend an average of 315 hours in training over their lifetime, less than half the level of French workers, and significantly behind other leading economies like Germany and the United States.

Furthermore, countries such as China and India are no longer only prepared to compete on a low skilled basis but are also a significant threat to the UK.

Mr Patel added: “Whilst the Coalition’s new strategy seeks to shift the balance of responsibility away from the state, it needs to be clear about how business will contribute their fair share or we risk a further decline in UK competitiveness.”

Although the BIS strategy clearly demonstrates how more money will be obtained from individuals, it fails to define how greater investment will be obtained from employers.

The Fair Shares report warns that the recent cuts to the FE and skills budget mean that the UK is destined to see a collapse in training investment unless a comprehensive strategy is adopted to secure greater investment in skills from individuals and employers.

The report states “the Government’s economic recovery plan could be jeopardised unless more is done to help employers to play a fuller role in developing the skills needed for the future”.

It continues: “In particular, individuals will be required to bear a greater burden as public funding is reduced. However, the Government is far less clear about how employers will be required to take this responsibility for paying their fair share.”

Fair Shares proposes that a critical part of skills investment would be to ensure that the UK has a modern training infrastructure with the latest technology to stimulate economic growth.

Four proposed key measures

Firstly, the report calls on the government to adapt a comprehensive strategy for employer responsibility for skills. This would entail a variety of solutions, including a significant expansion of employer contributions, innovative delivery mechanisms, and using a variety of methods appropriate to different industries.

Secondly, in conjunction with an expansion of industrial licences to practice – where there is public interest – the government is being urged to expand levies to drive employer investment.

In order to ensure compliance and guarantee adequate investment, the report also suggests the government sets clear milestones to introduce a statutory system in sectors that have not voluntarily introduced training levies and/or new professional standards.

And finally, the report states the government should expand and set up more national and local skills academies in order to develop innovative ways of up-skilling the current and future workforce.

Aastha Gill